New Delhi: HDFC Bank, India’s leading mortgage lender, on Saturday, May 7, hiked the retail premium rate for home loans by 30 basis points from May 9.
The recent rise in the retail prime lending rate for home loans will lead to an increase in EMIs paid by borrowers. The Reserve Bank of India (RBI) has decided to hike HDFC rates after raising repo rates earlier this week.
The Reserve Bank raised the repo rate by 40 basis points to 4.40%. This is the first rate hike in RBI rates in two years.
Earlier, Reserve Bank of India Governor Shaktikanta Das on Wednesday announced a hike in the repo rate. The Reserve Bank raised the repo rate by 0.40%.
Prior to HDFC, many public and private lenders raised their lending and deposit rates after the RBI’s abrupt move on Wednesday. For example, ICICI Bank and Bank of Baroda have increased their external benchmark lending rate by 40 bps.
“ICICI Bank External Benchmark Lending Rate (I-EBLR) is the RBI policy repo rate, marked as mark-up rather than repo rate. I-EBLR is 8.10 percent p.a.p.m. Effective May 4, 2022, ”ICICI said on its website.
EPLR is the lending ratio determined by banks taking into account external criteria. These factors include repo rate, reverse repo rate and other factors. In simple terms, EPLR is the minimum interest rate for borrowers to withdraw money from banks.
In his speech, Reserve Bank Governor Shaktikanta Das said, ‘The state of the world economy is deteriorating. Inflationary pressures continue in the economy. Continuing rising inflation is worrying. The forecast for inflation and growth has changed due to the war. ‘